Why Was Th CA Neeraj Khanchandani’s Health Insurance Claim Rejected?

Introduction

I recently read an eye-opening article on Business Today about a Chartered Accountant, Neeraj Khanchandani. His parents’ health insurance claim was rejected. I also read the post of Neeraj on Linkedin.

The reason? “Non-disclosure.”

This got me thinking, what really happened here? Why do insurers reject claims, especially for senior citizens?

In this post, I’ll share my personal understandings about health insurance claims. I had a similar experience in 2007 with my personal family-insurance, but the claimant was not for a senior citizen.

I can actually feel the pain.

1. Neeraj Khanchandani Story: A Recap

On July 30, 2025, MSN published this article titled “‘This could be your parents next’: CA exposes how India’s insurance system fails senior citizens.”

It tells the story of Neeraj Khanchandani, a Mumbai-based CA, who faced a nightmare with his parents’ health insurance.

He ported their policy to a new insurer, hoping for better coverage.

But when they filed a claim, the insurer rejected it, citing “non-disclosure” of a pre-existing condition. Worse, they canceled the policy entirely in 2024.

Khanchandani insisted he had disclosed everything. His attempts to resolve the issue through grievance mechanisms also failed.

I’ll talk about the broader issues our health insurance sector.

We’ll IRDAI’s reforms, like reducing the waiting period for pre-existing diseases from four to three years (read this post of Bajaj Allianz).

We know, how premiums for seniors are skyrocketing, sometimes by 30% or more.

There is also a Policybazaar survey that notes that 75% of policyholders have coverage of Rs.10 lakh or less, often insufficient for rising medical costs.

The Ayushman Bharat scheme offers hope for seniors above 70, but awareness and implementation are lacking.

This story isn’t just about one family, it’s a wake-up call for all of us.

2. Why I’m Writing This Post

I’ve seen many people struggle with insurance claims beyond my personal story).

Health insurance is supposed to be a safety net, especially for our parents. But stories like Khanchandani’s make me wonder, why do claims get rejected?

Was it really non-disclosure, or is something else at play?

I’m digging into this case to understand what could have gone wrong.

My goal is to break down the possible reasons, based on standard insurance rules in India.

By the end, I’ll share my view on whether this rejection was fair. So, let’s get started.

3. Understanding Health Insurance in India

Health insurance is a contract.

You pay premiums, and the insurer promises to cover medical expenses. It’s supposed to be this simple.

But the fine print is where things get messy. Policies come with terms like waiting periods, exclusions, and disclosure requirements.

For senior citizens, these rules are stricter. Insurers know medical costs for the elderly are high. So, they scrutinize claims closely (possibly with intentions to find small-small reasons to reject the claim).

In 2022, in my close family, a senior citizen’s (70+) health claim (angioplasty) was rejected. But I’ll give the benefit of doubt to the insurance provider as the policy was new (just about a year plus).

In Khanchandani’s story, the case revolves around “non-disclosure.”

Let’s explore what that means.

4. What Is Non-Disclosure?

When you buy health insurance, you must declare all pre-existing conditions, like diabetes, hypertension, or heart issues.

This is called full disclosure.

If you miss something, even by mistake, the insurer can call it “non-disclosure.”

This gives them grounds to reject claims or cancel policies.

In Khanchandani’s case, the insurer said a condition wasn’t disclosed. He claims he shared everything. So, who’s right?

Note: Remember, in Neeraj’s case the policy was 13-years old (till 2021) when he decided to port his policy. It was not a new policy.

5. Was the Waiting Period a Factor?

Many of you might think the rejection was due to the waiting period.

Most policies have a 3-year waiting period for pre-existing conditions.

After this, insurers must cover these conditions. IRDAI reduced this period to three years recently.

Since Khanchandani ported his parents’ policy, the waiting period from the old policy should carry over.

It means, if they had coverage for over three years, the waiting period shouldn’t apply.

The article doesn’t mention the policy’s age (but I assume it was about 2 years old – based on the Linkedin post of Neeraj), but the rejection was about “non-disclosure,” not the waiting period.

So, ‘waiting period’ likely wasn’t the issue.

6. Other Possible Reasons for the Rejection

Let’s dive into why the claim might have been rejected.

Based on how insurance works in India, here are the key possibilities (you can also jump to my person view about this case here):

1. Discrepancy in Medical History: Insurers ask for detailed medical history during policy purchase or porting. If Khanchandani’s parents missed listing a condition, like a minor surgery or occasional medication, it could be labeled non-disclosure. Even honest mistakes can lead to rejections. Did something similar happen here?
2. Porting Complications: Porting means moving your policy to a new insurer without losing benefits. IRDAI rules say the waiting period carries over. But the new insurer rechecks your health details. If they found a condition not listed in the old policy’s records, they could cry foul. Maybe there was a gap in documentation during porting. It’s common for insurers to dig deep when you port, especially for seniors (you know why – risk is higher). Hence, I’ll never port a health policy of a senior citizen or of a patient with a critical health condition.
3. Insurer’s Strict Interpretation: Insurers often interpret “non-disclosure” broadly. Say Khanchandani’s parents mentioned diabetes but not a related complication, like neuropathy. The insurer might claim this wasn’t fully disclosed. There are number of stories of insurers rejecting claims over tiny details, like not mentioning a one-time hospital visit. It’s frustrating, but it happens. These small-small things become bigger when the policy gets ported and the claim happens in within the waiting period of 3 years (though in Neeraj’s case, waiting period was not applicable).
4. Policy-Specific Exclusions: Some policies exclude certain treatments or conditions, even after the waiting period. For instance, a policy might cap coverage for a specific heart-related issues. If the claim fell under such an exclusion, it could be rejected. But in Neeraj’s case, as the focus was on non-disclosure, so this seems less likely.
5. Suspected Fraud: If the insurer thought Khanchandani deliberately hid a condition to get lower premiums. In this case they could reject the claim and cancel the policy. This is serious. Khanchandani’s public post on LinkedIn suggests he’s confident in his transparency. But let me tell you, insurers are quick to assume the worst.

7. What Could Khanchandani Have Done Differently?

There is a phrase which says “Hindsight is 20/20.”

It’s very easy for people like me to see what should have been done after an event has occurred, as things become clearer in retrospect.

I mean no disrespect to Neeaj, I know he being a CA, is well qualified for take care things like this – much better than me.

But taking the benefit of age, I’ll share a few quick tips for my readers.

• Do Not Port: If a senior citizen has an old health policy (like 13+ years), do not port. Maybe the premium will be slightly higher, but I’ll bear with it. This is also true for younger patients (non senior citizens). If they had been treated for a critical illness in the past, under a health cover, do not port such a policy. In my case, I had a Tata Aig health cover. After the diagnosis of a very critical disease they increased the premium by almost 60% (but they said its because of post-covid situation – so I don’t know for sure), but after doing the analysis I found it better to stick to the same Insurance provider. though I’ll say, apart from this premium hike episode, Tata Aig is good.
• Double-Check Disclosures: Always list every medical condition, even minor ones, in writing. Keep proof of the submissions. This rule is valid while you are buying a new polity or porting an older one. Try to brutally honest in your disclosures. Let them see all the reports. Our fear is, they will hike the premium. In a way it is good, because then you can compare the actual premium between your current provider and the new one.
• Understand Porting: Before porting, confirm all health details transfer correctly. Ask the new insurer to clarify what they need, keep asking them till they give you in writing that the need nothing more.
• Seek Expert Help: A CA like Khanchandani likely knew the rules very deeply, but everyone is not an expert like him. So, I’ll suggest, consulting an insurance advisor to buy a new cover or even during porting.

8. My Views: Was the Rejection Justified?

I don’t think the rejection was justified.

IRDAI rules are clear: insurers can’t reject claims for pre-existing conditions after the waiting period, unless there’s clear proof of non-disclosure.

Khanchandani, a CA, likely knew the importance of full disclosure. His public outcry on LinkedIn suggests he’s confident in his transparency.

The insurer’s claim of “non-disclosure” feels like a convenient excuse.

Without seeing the exact policy or medical records, I can’t be 100% sure. But rejecting a claim and canceling the policy entirely? That smells like a tactic to avoid paying out.

Insurers often use “non-disclosure” as a catch-all to dodge claims, especially for seniors in a waiting period zone.

It’s a pattern I’ve personally seen too often.

As the burden of proof falls on the policyholder, which is unfair when you’re already dealing with medical emergencies.

Neeraj Khanchandani’s failed attempts at grievance redressal only strengthen my view.

I’ve no doubt in saying that the system let him down.

If the insurer had solid evidence of deliberate non-disclosure, they should’ve shared it transparently. Instead, they left a family high and dry.

That’s not right.

What Can We Learn?

This story is a reminder to be proactive.

Check your policy’s fine print. Declare every health detail, no matter how small. Keep records of all communications with your insurer.

If you’re porting, double-check the process. And push for better coverage, Rs.10 lakh might not cut it anymore.

Let’s also hope IRDAI tightens the screws on insurers to make claim rejections fairer.

What do you think, friends? Have you faced similar issues with insurance claims? If you feel the pain of Neeraj, may I ask you to share this post of social Media. You can post your views in the comments section below.